Thyssenkrupp to seek new steel partners for European merger with Tata Steel

2019-05-14

May, 14, 2019 - Thyssenkrupp will still seek partners for its steel operations after abandoning a European merger with Tata Steel, Chief Executive Mr Guido Kerkhoff said in comments published on Sunday. Mr Kerkhoff ditched a restructuring plan on Friday, in which the merger was a key part, and resolved instead to transform the steel-to-submarines group into a holding company and list its profitable elevators business. He has since agreed on a way forward with labour unions for his new strategy, which foresees 6,000 job cuts, about 4% of the Thyssenkrupp workforce. The blueprint will go to a supervisory board vote on 21 May. Thyssenkrupp abandoned its long-planned merger of its steel business with the European operations of Tata Steel, which would have created the region’s Number 2 producer after ArcelorMittal, due to opposition from European Union regulators.

Mr Kerkhoff told the Handelsblatt business daily’s online edition that “Of course, with steel, we are looking to see what other consolidation options there are. But with the current position of the European Commission, I don’t see the possibility of bigger mergers. As a result, we will remain the majority shareholder.”

Mr Kerkhoff said that “We will get cracking on that as quickly as possible and then see what the right moment is.”

Thyssenkrupp, which has warned it would report negative cash flow this year, is seeking a financial shot in the arm from the partial float of its elevators division.

Asked whether investors could expect a special dividend from the float’s proceeds, Mr Kerkhoff said that “We want to strengthen the balance sheet of Thyssenkrupp to gain more room for manoeuvre on the restructuring. That has absolute priority.”